In “The Problem of Scale in Anarchism and the Case for Cybernetic Communism,” Aurora Apolito writes:
I don’t believe that markets can be “liberated” from capitalism, nor that they can do anything good anyway, regardless of their liberated status. In essence, this is because I view the market mechanism as running on a steepest descent towards a cost/energy minimum, in an attempt to maximize profit, which inevitably singles out the least valuable options, while wiping out anything that is of any value (but is not profit-making) along the process.
The profit driven maximization process of markets is not a viable option, not because “profit” is a bad word (it is!) but because of the way the dynamics works: even if one could start with an ideal initial condition of equally distributed wealth, even very small fluctuations will get largely amplified, rapidly reproducing a situation of uneven accumulation. In the profit dynamics of markets an equitable wealth distribution is necessarily an unstable condition. That’s in essence why markets cannot be liberated from capitalism. Markets are an automated generator of capitalist wealth inequalities, which can quickly and easily wipe out any hard-won gains that costed major social upheavals and difficult revolutionary actions to achieve. (We all want a Revolution, but not one that will immediately go wasted just because someone will turn on it the fast-capitalism-restoring-machine commonly known as markets!) To avoid a runaway reaction of wealth disparity accumulation, one needs to design an entirely different optimization process that does not reside in the market mechanism of profit maximization
First of all, there is no necessary connection between markets and a “profit driven maximization process” or “profit dynamics.” I argue not on the grounds merely of economics, but of history. Whether markets are a “fast-capitalism-restoring-machine” is a hypothetical; but we can see, from looking at history, that while markets have existed for thousands of years, capitalism only came about in modern times. And where it has come about, starting in Western Europe, it did not emerge as an outgrowth of markets as such.
A society in which markets exist is not the same thing as a society in which commodity production and exchange are hegemonic, and the primary form of economic coordination. While markets have existed for thousands of years, until just a few centuries ago the overwhelming majority of production was for direct use, and took place outside the market mechanism. The incorporation of virtually all production and distribution into the cash nexus is a phenomenon imposed by early modern states, through the massive use of force.
And the triumph of the cash nexus and commodity production was itself only one among several structural changes likewise violently imposed by states, which were taken together all necessary for the rise of what we know as capitalism. Most important among these were the violent suppression of communal property rights in the land through Enclosure in the West, coupled with violent imposition of work discipline on the dispossessed peasantry, and the conquest and colonial looting of land and natural resources elsewhere in the world. In other words, capitalism was not the cause of concentrated private property ownership, but the result of it.
Historically speaking, the predominance of the cash nexus and commodity production/exchange came not through markets as such, which have existed on the margins for millennia, but were imposed by states. The concentrated ownership of the means of production, the dispossession of laboring classes from ownership in the means of production, and the wage system, did not come about — as in the hypotheticals of the anti-market Left — through a natural sorting process of winners vs. losers in the competitive market, but through massive land expropriations and totalitarian social control. And the growth of accumulated wealth in a few hands at everyone else’s expense, through the compound interest mechanism, requires artificial scarcities and artificial property rights like absentee landlordism, capitalist monopolies on the supply of credit, and intellectual property.
Second, there are plausible models for post-capitalist/non-capitalist societies that use markets for at least part of their calculation functions without inter-firm competition or profit entering the picture at all. The use of a market mechanism for allocational purposes does not at all imply an economic model centered on production by profit- or anything else-maximizing firms, or any significant level of competition between such firms. Far from it.
Although I refuse to prescribe any particular organizational template or economic model for a post-state, post-capitalist society, I’m strongly inclined to believe that the great majority of consumer goods (small appliances, food, clothing, furniture, etc.) will be produced on a largely communistic basis — i.e. for direct use, within micro-villages or other multi-family co-living units, and allocated based on something like Bookchin’s “irreducible minimum” of guaranteed subsistence to which individuals are entitled by virtue of membership in such co-living units.
I suspect, likewise, that most of the larger-scale infrastructures Apolito mentions in her discussion of scale — transportation, telecommunications, etc. — will be run as federated platforms with standing governance bodies representing the communities served by them and the peer producers or guilds that actually deliver their services. And industries that require larger scales of production — heavy producer goods, airships, trains, etc. — will likewise be projects serving federations of local communities.
The most likely role for markets will be, not to allocate production to the most efficient producer among a number of competing producers, but to allocate finite production inputs (e.g. the raw materials generated from commons-based natural resource governance bodies, and intermediate or producer goods produced by larger-scale industry) to their most efficient use among competing alternatives. A secondary use for markets might be to exchange surpluses between communities or co-living arrangements, in order to promote a more efficient division of labor between communities, based on specialization in particular crops, or skills disproportionately possessed by their members.
In other words, their primary use will be to carry out the very functions that Apolito outlines as a problem:
Even in a post-scarcity scenario, with abundant availability of renewable energy, certain materials would remain scarce, simply due to the different relative distribution of the chemical elements in the universe. Avoiding wastefulness and minimizing environmental impact would remain valuable goals. Such minimization problems are indeed well handled by techniques such as linear programming and are easily agreed upon. It is maximization goals that present the hard part of the question in our scaling problem.
The issue is not whether forms of optimization are in themselves helpful, but rather what is being optimized. The main problem, which I will return to, is that when it comes to the distribution of services in a large-scale form of communist economy, a much higher level of informational complexity is required to design a valid system of valuations and constraints, one that does not reflect the simplistic capitalist notion of profit, but that can capture advantages that only take place on a much larger spatiotemporal scale and at much deeper complexity levels.
This is not to say that markets will be used to the exclusion of other mechanisms she discusses, such as decentralized cybernetic feedback networks. I am, as I said in my initial contribution, agnostic on the particular mix of coordination methods.
But given initial conditions like appropriately defined property rules (i.e. permanently vesting land and natural resources in commons-based ownership, organizing bodies engaged in production or communications as stakeholder cooperatives or standing platforms with inalienable governance rights, etc.), markets are a very high-bandwidth way to convey information without any need for conscious planning — and without the danger of negatively affecting the distribution of productive assets, or distributing control over production among competing organizations. The primary incentive for optimizing efficiency, in terms of input-output ratios, will lie not in competition between productive organizations, but in the desire of producers themselves to minimize their effort while maximizing standard of living.
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